Los Angeles Controller Wendy Greuel forecast Tuesday that the city’s general fund revenue will fall to $4.19 billion in the upcoming fiscal 2010-11 budget year.
That’s a decrease of 4.8% from the adopted 2009-10 budget and a decrease of 0.4% from current estimates of 2009-10 revenues.
Mayor Antonio Villaraigosa and the council have been working to reduce this year’s $212 million deficit and to close next year’s $484 million budget gap by ordering layoffs of thousands of city workers.
Standard & Poor’s last month downgraded the city’s general obligation bond rating to AA-minus on it slow response to the budget crisis. Fitch Ratings cut the city’s GOs to AA-minus in November, and Moody’s Investors Service last month changed its outlook on the city’s Aa2-rated GOs to negative.
“The mayor and the City Council cannot — and should not — count on an increase in tax revenue to help balance the city’s budget next year,” Greuel said. “We anticipate tax revenue will be dramatically lower in almost every category.”
The controller said property tax collections — the city’s biggest revenue source — will fall 2.8% from 2009-10, business taxes will drop 3.1% and licenses, permits and fines will plunge 5.9%.
Sales, utility, hotel and real-estate transfer taxes will all rebound from a drop this year, as the economy begins to recover.
The forecasts are based on economic forecasts from a panel of professional forecasters.
“While we believe that the city will see a modest economic recovery in the coming year, it would best be described as slow and gradual,” Greuel said.
The city’s cash-flow borrowing needs will increase to $550 million from $400 million in the current fiscal year.